Washington is one of nine states with no state income tax. If you work in Washington, you won't see any state income tax withholding on your paystub. However, Washington has two unique payroll deductions — the WA Cares Fund and Paid Family & Medical Leave — that do appear on your pay statement.
No State Income Tax
Washington does not impose a personal income tax on wages, salaries, or other earned income. This means:
- No state income tax line on your paystub
- No state tax return to file for wages
- More take-home pay compared to states with income tax
- Particularly advantageous for high earners in the tech sector
Washington generates revenue primarily through sales tax (6.5% state rate) and business taxes (B&O tax) rather than personal income tax.
What You Will See on Your Paystub
While Washington has no state income tax, your paystub will show federal income tax withholding plus Washington-specific payroll taxes:
| Deduction | Rate | Notes |
|---|---|---|
| Federal Income Tax | Varies | Based on W-4 and income (10% - 37%) |
| Social Security | 6.2% | Up to $181,200 wage base |
| Medicare | 1.45% | No wage limit; additional 0.9% over $200,000 |
| WA Cares Fund (LTC) | 0.58% | Employee-paid, no wage cap |
| WA Paid Family & Medical Leave | ~0.54% | Employee share (~72.76% of 0.74% total) |
| State Income Tax | 0% | Not applicable in Washington |
WA Cares Fund (Long-Term Care Tax)
The WA Cares Fund is a first-in-the-nation long-term care insurance program funded through a payroll tax:
- Rate: 0.58% of all wages with no cap
- Paid by: Employees only — your employer does not contribute
- Appears on paystub as: "WA Cares," "LTC," or "WA LTC"
- Benefit: Up to $36,500 (lifetime) in long-term care benefits once vested (10 years of contributions or 3 years in the last 6)
The WA Cares Fund has no wage cap. A worker earning $200,000 pays $1,160 per year, while a worker earning $50,000 pays $290 per year. There is no maximum contribution.
WA Cares Fund Exemptions
You may be exempt from the WA Cares Fund deduction if you:
- Purchased private long-term care insurance before November 1, 2021, and applied for an exemption
- Are a non-immigrant temporary worker (H-1B, L-1, etc.)
- Are a military spouse covered under certain provisions
- Work in Washington but live in a bordering state
If you hold an approved exemption, the WA Cares deduction should not appear on your paystub. Verify with your employer if it does.
Paid Family & Medical Leave (PFML)
Washington's PFML program provides paid time off for qualifying life events:
- Total premium rate (2026): 0.74% of wages
- Employee share: Approximately 72.76% of the premium (~0.54% of wages)
- Employer share: Approximately 27.24% of the premium (~0.20% of wages)
- Wage cap: Social Security wage base ($181,200 in 2026)
- Appears on paystub as: "WA PFML," "PFML," or "FML"
The program provides:
- Up to 12 weeks of paid family leave (bonding with a new child, caring for a family member)
- Up to 12 weeks of paid medical leave (your own serious health condition)
- Up to 16 weeks combined in a single year for overlapping qualifying events
- Benefit amount: up to 90% of your weekly wages (formula-based, with a weekly maximum)
Small employers (fewer than 50 employees) are not required to pay the employer share of PFML premiums, but their employees still contribute the employee share.
Other Washington Taxes
Washington generates revenue through other taxes instead of income tax:
- Sales Tax: 6.5% state rate, plus local taxes up to 4% (10.5% max in some areas)
- Property Tax: Varies by county, averaging around 0.9% of assessed value
- Business & Occupation (B&O) Tax: Applies to businesses, not employees
Seattle Metro Workers
Seattle is Washington's largest city and the economic center of the Pacific Northwest:
- Major tech employers: Amazon (headquartered), Microsoft (Redmond), Google, Meta, and Apple (expanding presence)
- Boeing (commercial airplane assembly, though some production moved to South Carolina)
- Healthcare (UW Medicine, Swedish, Virginia Mason)
- Port of Seattle (international trade and cruise industry)
- No local income tax — Seattle does not levy a city income tax
Seattle's combination of no state income tax and high tech salaries makes it a financially attractive alternative to San Francisco and New York for tech workers, despite a higher cost of living than most of the state.
Tacoma Workers
Tacoma is the second-largest city in the Puget Sound region:
- Port of Tacoma (one of the largest container ports in North America)
- Joint Base Lewis-McChord (Army and Air Force)
- Healthcare (MultiCare, CHI Franciscan)
- Growing as an affordable alternative to Seattle
- No local income tax
Spokane Workers
Spokane is the economic hub of eastern Washington:
- Healthcare (Providence, MultiCare)
- Education (Gonzaga University, Washington State University nearby)
- Manufacturing and distribution
- Significantly lower cost of living than western Washington
- No local income tax
Bellevue Workers
Bellevue is part of Seattle's Eastside tech corridor:
- Microsoft headquarters (Redmond, adjacent)
- T-Mobile headquarters
- Meta, Google, and Amazon satellite offices
- One of the highest median household incomes in the state
- No local income tax
Tech Industry
Washington is home to some of the largest technology companies in the world. The absence of state income tax is a significant draw for high-earning tech workers:
- Amazon, Microsoft, and Boeing are headquartered in Washington
- Tech workers receiving RSUs and stock options benefit because Washington does not tax equity compensation at the state level
- The only state-level payroll deductions affecting tech workers are WA Cares (0.58%) and PFML (~0.54%)
- Compared to California (up to 13.3% state income tax on stock compensation), a Washington-based tech worker earning $200,000 with $100,000 in RSU vesting saves approximately $8,000 to $12,000 per year in state taxes
Many tech companies offer the option to transfer between California and Washington offices. The state income tax savings alone on a $250,000+ total compensation package can exceed $15,000 per year.
Retirement Income
Washington does not tax any form of retirement income:
- Social Security benefits: Not taxed
- Pensions (public and private): Not taxed
- 401(k) and 403(b) distributions: Not taxed
- IRA withdrawals: Not taxed
- Military retirement pay: Not taxed
Washington's lack of state income tax applies to all income, making it one of the most tax-friendly states for retirees.
Military Personnel
Washington has a significant military presence:
- Joint Base Lewis-McChord (JBLM) — Army and Air Force, one of the largest military installations on the West Coast
- Naval Base Kitsap (Bremerton and Bangor) — home to the Pacific Fleet's submarine force
- Fairchild Air Force Base (Spokane)
- Naval Station Everett
Military tax considerations in Washington:
- Active duty pay is not subject to state income tax (because Washington has none)
- Military retirement pay is not taxed
- Military spouses earn income in Washington with no state income tax withholding
- Service members still owe federal income tax on military pay regardless of duty station
Working Remotely
If you live in Washington but work for an employer in another state:
- You generally won't owe Washington state income tax (there isn't one)
- You may owe income tax to the state where your employer is located
- Some states have reciprocity agreements that affect this
If you work remotely for a New York employer, you may still owe New York taxes under their "convenience of the employer" rule. Verify your tax obligations if your employer is based in a state with such rules.
Washington vs. Neighboring States
| State | Tax Structure | Top Rate |
|---|---|---|
| Washington | None | 0% |
| Oregon | Progressive | 9.9% |
| Idaho | Flat | 5.8% |
| Montana | Progressive | 5.9% |
The contrast between Washington (0%) and Oregon (up to 9.9%) is one of the largest interstate tax differences in the country. Workers living in Vancouver, WA, and commuting to Portland, OR, owe Oregon income tax on wages earned in Oregon.
Comparing Take-Home Pay
Here is how annual state income tax compares for a single filer at different salary levels:
| Annual Salary | Washington | Oregon | Idaho | California |
|---|---|---|---|---|
| $50,000 | $0 | ~$3,500 | ~$2,300 | ~$1,580 |
| $75,000 | $0 | ~$5,600 | ~$3,700 | ~$3,200 |
| $100,000 | $0 | ~$7,400 | ~$5,100 | ~$5,200 |
Washington workers do pay WA Cares (0.58%) and PFML (~0.54%) from their paychecks, totaling about 1.12% of wages. Even including these, total state-level deductions are far lower than Oregon's 9.9% or California's combined income tax and SDI.
Key Takeaways
- Washington has no state income tax on wages, salaries, or investment income
- Two payroll deductions still appear: WA Cares Fund (0.58%) and Paid Family & Medical Leave (~0.54% employee share)
- WA Cares has no wage cap, so high earners pay more in absolute dollars
- No city or local income taxes anywhere in the state
- Tech workers benefit significantly — no state tax on RSU vesting or stock option exercises
- All retirement income (Social Security, pensions, 401(k), IRA) is free from state tax
- The WA-to-OR tax difference (0% vs. 9.9%) is one of the largest interstate contrasts in the nation